Numinus Wellness Inc. (TSX: NUMI) (OTCQX: NUMIF), which focuses on evidence-based psychedelic-assisted therapies, posted strong financial results for the third quarter ending May 31, 2023. The company saw revenue surging 713.3% year-over-year to $6 million, marking a 12.6% growth from the previous quarter.
The company also highlighted a gross profit of $2.1 million, which represents a 1051.6% increase from the same quarter last year. Numinus said that it has leaned the organization a bit through “staff reductions and operational realignment,” incurring $600,000 in one-time expenses during the quarter. The company also reported a net loss of $7.2 million in the quarter.
Still, Numinus is financially well-positioned with $13 million worth of cash in the coffers as of May 31, 2023.
“We’re on the verge of a pivotal turning point for the psychedelics sector,” Payton Nyquvest, founder and CEO of Numinus, said in a statement.
He emphasized the expected FDA approval of MDMA-assisted therapy and the growing cultural awareness of such treatments. Nyquvest noted that Numinus is focusing on developing scale and strategic partnerships to bolster its clinical infrastructure and practitioner training programs.
Nyquvest also detailed the strategic steps the company undertook during the quarter to better align with future opportunities related to the anticipated approval of MDMA-assisted therapy. That includes launching the Numinus Network licensing program, focusing capital and resources on revenue-generating business lines, and preparing for expanded insurance payor coverage of psychedelic-assisted therapies.
Those steps are intended to improve the productivity of the company’s clinics and training offerings, it said, to drive higher long-term margins and extend the company’s cash runway. The CEO anticipates the full impact of the changes to be noticeable within the coming months.
The wellness clinics of Numinus generated $5 million in revenue during the quarter, a 5.5% sequential increase from the $4.7 million reported in the second quarter. The company credits this rise to an elevated number of client appointments and the strong performance of its subsidiary Cedar Clinical Research.
Gross margins for the quarter fell to 34.5%, down from 39.3% in the previous period. The dip was attributed to the increased number of full-time practitioners and the performance of certain clinic locations, which the company is actively seeking to optimize.
During the third quarter, Numinus said it executed several initiatives aimed at reducing cash expenses and focused operations on revenue-generating activities. Consequently, the company’s operating expenses for the period totaled $9.2 million, which includes the $600,00 worth of expenses related to staff reductions.
Looking ahead, Numinus plans to continue its expansion in anticipation of the expected future approval of MDMA-assisted therapy. This would include the launch of the Numinus Network wellness clinic licensing platform, a model which facilitates independent practitioners to own and operate a Numinus-branded full-service clinic.
“We expect the true impact of these changes will begin to be demonstrated in the next few months,” said Nyquvest.